Question

"Financial leverage primarily affects the left-hand side of the balance sheet.

A True
B False"

Answer 1

Financial leverage primarily affects the right-hand side of the balance sheet, not the left-hand side.

Step-by-step explanation:

Financial leverage primarily affects the right-hand side of the balance sheet, not the left-hand side. The left-hand side of the balance sheet represents the company's assets, which include cash, inventory, property, and equipment. The right-hand side represents the company's liabilities and shareholders' equity, which include debt, accounts payable, and common stock.